MATAMOROS, Mexico – Here, in a densely populated border city across the Rio Grande from Brownsville, Tex., the name of an infamous locale in India is heard with stunning frequency. “We don’t want to be the next Bhopal,” said Erasmo Lucio Garza, referring to the site of the 1984 toxic gas leak at a Union Carbide subsidiary that left almost 3,000 dead and 200,000 injured in the world’s worst industrial accident.

Garza, a farmer, lives across the road from a vast multinational chemical production complex, Quimica Fluor, an imposing tangle of pipes, tanks, storage spheres and smokestacks that rises above the subtropical flatlands.

The plant is one of the Americas’ largest producers of hydrofluoric acid, also known as hydrogen fluoride. It is a highly corrosive substance boasting multiple modern-day applications, among them the making of refrigerants and the refining of gasoline. Most of the acid produced here is shipped via rail for sale in the United States, a production and marketing stratagem likely to broaden to many industries should the two nations sign a free-trade agreement.

Hydrofluoric acid also is highly toxic — it can burn through skin and bone and lead to fatal internal damage if inhaled. Accidental releases have caused injuries, deaths and evacuations in and around various U.S. refineries in recent years. (However, there have been no serious acid leaks here since a release killed two workers and injured five others in 1980, according to Quimica Fluor.)

This plant is two-thirds owned by Compania Minera Frisco, a Mexico City company, and one-third the property of E. I. Du Pont de Nemours & Co., the Delaware-based giant.

Despite assurances from the owners that the plant is safe, the Mexican government was so concerned about the possibility of a Bhopal-style disaster that President Carlos Salinas de Gortari signed a decree last January creating Mexico’s first-ever “Intermediate Safeguard Zone.” The decree halts additional settlements within a 1 1/4-mile radius of Quimica Fluor’s central smokestack.

For many of the tens of thousands of mostly poor inhabitants within the belt and adjacent communities, the action has sinister overtones. It is widely viewed as the precursor of an attempt to expropriate their hard-earned properties. Residents fear that the government would like to create a free-trade industrial corridor where companies can conduct cross-border commerce without fear of liability and bad publicity associated with a catastrophe.

Neighboring communities have struck back, calling instead for a relocation of the Quimica Fluor facility and other nearby, mostly foreign-owned chemical plants. Quimica Fluor has been in operation since 1975, but neighbors — many of whom have lived here for 20 years or more — say they only learned of the severity of the prospective threat since the presidential decree in January.

“We fought for everything we have — our land, our roads, our schools — and we’re not going to let a foreign factory throw us out,” vowed Maria Isabel Garcia de Caramillo, a 67-year-old grandmother of 28 who lives in the area and is one of a number of working-class women active in the campaign. “It’s the foreign plants that should go, not us.”

That rallying cry could echo elsewhere in Mexico, particularly along the northern border, if a free-trade agreement is signed and even more U.S. and multinational companies seek to set up operations in Mexico.

“We are afraid that it is we and our children who will be paying the price of progress. My question is this: Whose progress are we paying for?” asked Maria Teresa Mendez Garcia, who was among a group that traveled to New York in June to protest the United Nations decision to award President Salinas an Earth Prize, honoring his environmental accomplishments. “We don’t understand how relocating thousands of poor people to protect a chemical company can merit an environmental prize.”

Added her sister, Emma Mendez Garcia, “We’re living in a time bomb here.”

Neighborhood dwellers, many of whom have found employment in the mostly U.S.-owned factories that are clustered throughout the city, say they favor industry and foreign investment. However, they contend that hazardous facilities should be sited in industrial zones, not spotted haphazardly amid populated districts, as is so common along the northern border and elsewhere in Mexico. (An explosion at a petroleum storage facility in Mexico City in November, 1984, transformed an adjoining community into an inferno, killing at least 334, according to official figures.)

Mexican authorities and executives of Du Pont and Quimica Fluor say they do not seek the expulsion of residents. Rather, they portray the decree as a pioneering effort to reduce the threat of human injury or death in case of an accidental release of hydrofluoric acid.

“The resource we are most concerned about protecting is our human resource,” said Sergio Reyes Lujan, ecology undersecretary in the Secretariat of Urban Development and Ecology, known as Sedue, Mexico’s environmental ministry.

However, activists from Mexico and the United States point to evidence demonstrating that a 1 1/4-mile safety belt — an area that Mexican authorities say they arrived at after constructing models based on data provided by Du Pont and other sources — may do little good.

Industry-sponsored tests conducted in the Nevada desert in 1986 show that escaping hydrofluoric acid can become an aerosol of droplets, form a toxic plume and move downwind at lethal levels for about five miles. (A five-mile radius around the plant would include most of the populations of Brownsville and Matamoros, home to more than 500,000 people.)

“The potential for a Bhopal-like toxic gas cloud traveling five miles or more is there,” said Fred Millar, director of the toxics project of Friends of the Earth, a Washington-based public policy research and lobbying group. Millar traveled to Matamoros and joined in calling for the relocation of Quimica Fluor and other area chemical plants.

While hydrofluoric acid is not as toxic as methyl isocyanate, the insecticide ingredient released at Bhopal, Millar noted that the acid is produced and stored in much larger volumes. The Matamoros plant produces about 140 million pounds of hydrofluoric acid annually.

Executives at Du Pont and Quimica Fluor say moving the plant is not economically viable — or necessary. Meteorological conditions, especially prevailing winds and high humidity, would make any acid leak unlikely to drift beyond 1 1/4 miles, said Enrique Castillo Pena, the plant’s general manager, during an interview at offices on the 360-acre site on the northwestern outskirts of Matamoros.

“This facility is safe, and we are always making it safer,” declared Castillo, who noted that the plant has been outfitted with more than $15 million in safety equipment during the past decade, including computerized early detection devices, automatic shut-off valves, video monitoring apparatus and water cannons designed to halt dispersal of leaks.

At Du Pont, representatives say safety measures at the Matamoros facility are comparable to those at a fully owned Du Pont hydrofluoric acid production complex in La Porte, Tex., which is roughly the same size as the Mexican site. The Texas facility does not have large neighboring residential communities.

“I don’t think the Bhopal analogy really fits here,” said Carolyn S. Seringer, fluorochemicals safety manager at Du Pont’s corporate headquarters in Wilmington, Del. “I think we’re a victim of circumstances. The free-trade agreement has focused a lot of attention on the border, and the plant happens to be in the border area. . . . That plant is a state-of-the-art facility, and we continually upgrade it.”

Such efforts have not quelled the fears of Erasmo Lucio Garza and other residents of the Ejido Las Rusias, a residential farming community that begins about 100 yards from Quimica Fluor’s front gate. Children here are well-schooled in emergency reaction: Be alert for sirens signaling a release of the acid, don’t panic, determine the direction of the wind and flee in the opposite direction.

“To them it’s a game,” said Maria Inez Alvarado, director of a neighborhood preschool. “The problem is, we’ll never know until the last second when there is a real toxic leak. Do you really think little children like these will know what to do?”